(the Money Advice Service)

The State Pension is changing on 6 April 2016. If you’ll reach State Pension age on or after that date you’ll get the new State Pension under the new rules.

The current State Pension system is complicated. This makes it hard to work out how much State Pension you’re likely to get and in turn difficult to plan ahead for your retirement.

The new State Pension is designed to be simpler. But there are some complicated changeover arrangements which you need to know about if you’ve already made contributions under the current system.

Key changes to the State Pension

The earnings-related part of the current system for people who are employed, called the Additional State Pension, is being abolished.

The new State Pension will be based on your National Insurance (NI) record alone. To receive the maximum new State Pension, you require 35 years NI record. From April 2016 the new State Pension will be £155.65 per week.

However, if you have been ‘contracted out’ of the state scheme at any time in your working life the amount you receive under the new state pension may be reduced. Calculating this is complicated, but you can find out more information on GOV.UK.

Further information on this article can be read at:

https://www.moneyadviceservice.org.uk/en/articles/the-new-state-pension-rules-and-changes-explained

 

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